HKSAR v. Lam Man Yin

DCCC 923/2022

[2025] HKDC 1306

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 923 OF 2022

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REASONS FOR SENTENCE

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1.The 1^st Defendant (hereinafter referred to as “D1”)  pleaded guilty to Conspiracy to Deal with Property Known or Believed to Represent Proceeds of an Indictable Offence, contrary to section 25(1)  and (3)  of the Organized and Serious Crimes Ordinance, Cap 455 and sections 159A and 159C of the Crimes Ordinance, Cap 200. The property dealt with was USD 825,946 in a bank account of Funson Trading Limited (hereinafter referred to as “Funson”). D1 was the person who had acted on the instructions of D2, and had opened a company account for Funson.

2.On 12 April 2018, the Chief Financial Officer (“the CFO”)  of a company in Denmark, GM Plast A/S (hereinafter referred to as “the Company”)  received an email purportedly sent by its Chief Executive Officer and director (“the CEO”), requesting payment by attaching a Proforma Invoice issued by a Longqin Hong Kong Industrial Co Ltd (“Longqin”).  The CFO then transferred USD 424,195.02 to Longqin’s Hong Kong ICBC account.

3.On 16 April 2018, the CFO received another email purported sent by the CEO, requesting payment by attaching a Proforma Invoice issued by a Longqin Hong Kong Industrial Co Ltd (“Longqin”).  The CFO then transferred USD 518,460.08 to Longqin’s Hong Kong ICBC account.

4.On 19 April 2018, the CFO received another email purportedly sent by the CEO, requesting payment by attaching an Invoice issued by Ouman International Industry Co Ltd (“Ouman”).  The CFO then transferred USD 810,000 to Ouman’s Hong Kong ICBC account.

5.On 20 April 2018, the CFO received another email purportedly sent by the CEO, requesting payment by attaching an Invoice issued by Hengzheng International Ltd (“Hengzheng”).  The CFO then transferred USD 551,900 to Hengzheng’s Hong Kong ICBC account.

6.On 26 April 2018, the CFO received another email purportedly sent by the CEO, requesting payment by attaching an Invoice issued by Funson.  The CFO then transferred USD 826,000 to Funson’s Hong Kong ICBC account.

7.On 30 April 2018, the email scam was discovered, where none of the above emails were sent by the CEO, and all documents attached to the said emails were forgeries.  The Company suffered a total loss of USD 3,130,555.10 and reported to the Hong Kong police.

8.Funson was incorporated on 15 March 2017, and was dissolved on 5 June 2020.  D1 became and was at all material times the director and shareholder since 1 November 2017.  The police did not find any trace of Funson and its secretarial company at their respective registered address.  Funson had never filed any tax return, and had only paid the Business Registration fee for 2017.

9.On 26 January 2018, D1 opened a USD current account for Funson (“Funson’s account”), with D1 being the sole signatory.  The telephone number and email address provided for the said purpose belonged to D1.  D1 was also the shareholder and director of 2 other companies.

10.USD 331 and USD 825,946 were transferred by Interlinks International Limited (“Interlink”)  and the Company to Funson’s account on 25 and 30 April 2018 respectively.  On 30 April 2018, USD 245,740 (less charges)  were transferred from Funson’s account to Interlinks.

11.D1 had only filed tax return for the year 2018/2019, reporting being employed by Adecco Personnel Limited with yearly salary of HK$139,794.

12.D1 was arrested on 15 May 2019.  Whatsapp messages on her phone disclosed that between 3 November 2017 to 15 February 2018, she had reported to and sought instructions from D2 in respect of the opening of Funson’s and other companies’ bank accounts.

13.Whatsapp messages inside D2’s mobile phone disclosed the instructions he had given to D1 for opening bank accounts for companies including Funson.  D2 instructed or gave assistance to 15 other people to open bank accounts, one of which was D1’s sister who had received instructions from D2 to open bank accounts for 3 companies.

14.Whatsapp messages between D2 and D3 from 30 October 2017 to 25 May 2018 revealed that D3 gave instructions to D2 to arrange opening of multiple company accounts through D1 and her sister.  D3 was responsible for preparing company documents including the share transfer, and D2 was responsible for making arrangements for the account opening, and bringing the directors of the companies including D1 and her sister to the bank for account opening procedure.

15.In the VRI, D1 admitted that D2 offered her a job for opening company bank accounts.  She met D2 in November 2017, whereupon she was instructed to use the company documents provided to her to open company bank accounts for Funson and other companies at Dah Sing Bank (“DSB”).  She was also briefed by D2 on the answers to provide to the bank upon being asked in relation to account opening, and was instructed to familiarize herself with the company information prior to account opening.  On 26 January 2018, she attended DSB and applied for opening of Funson’s bank account.  She also stated that she had passed the bank documents and bank cards to D2 after completion of the account opening procedure.  She only knew that those were accounts for company business, but she had no knowledge about the business operation.  As she was heavily in debt and wanted to earn quick money, she did not consider much before deciding to take on the job.

D1’s Antecedent and Mitigation

16.D1 is 26 years old and has a clear record.  She was 20 years old when she committed the offence.  She resides with her parents and sibling.  She had attended but had yet to finish Associate Degree in Creative Media.  She works part time as puppy walker for an NGO which trains dogs for the visually impaired.  She donates regularly to an animal welfare charity.

Legal Principles on Sentencing

17.In HKSAR v Boma [2012] 2 HKLRD 33, the Court of Appeal indicated factors which should be taken into account when sentencing money laundering charges:

(a)  the nature of the predicate offence, if known, and the penalty available for the predicate offence;

(b)  the state of knowledge of the offender: the question of knowledge of the offender as to the nature of the predicate offence is relevant in that the person who knows the nature of the predicate offence is more culpable than the person who does not;

(c)  An international dimension will always be a significant aggravating feature;

(d)  The sophistication of the offence, including the degree of planning and whether deceit is practised to achieve the objective;

(e)  offence is committed by or on behalf of an organized criminal syndicate is an aggravating fact;

(f)  whether there is one transaction or many and the length of time over which the offence was committed;

(g)  it will be an aggravating feature where the offender continues to launder funds after he has discovered that the funds are the proceeds of an offence or after he has discovered the nature of an offence which is serious; and

(h)  the role of the offender and the acts performed by him.

Sentencing Considerations

18.I agree with the Defence that there is no evidence that D1 knew anything about the predicate offence, and that D1 was merely executing orders.  The presence and nature of the predicate offence, ie email scam, must, however, be considered.  The Company suffered a total loss of USD 3,130,555.10, although D1 is only convicted of dealing with USD 825,946, which was deposited into Funson’s account on 30 April 2018, for which around USD 245,740 was transferred out from the Funson account on the same day.  Defence submits that the balance of the amount deposited remained in the Funson account, and that Funson was able to recover the said balance.  I take into account such matters, but the potential loss cannot be completely disregarded.

19.The Company was a company from Denmark, and the amounts deceived from the Company were sent upon request of the fraudsters by 5 remittances to the bank accounts of 3 Hong Kong banks concerning 4 different companies, including that of Funson.  There is definitely the presence of an international element, which according to Boma, is a significant aggravating factor.

20.The offence was sophisticated.  It was part of a bigger scheme involving not just D1, but also D1’s sister and others (Lala and 2 males), as shown in the evidence of D1, and also the whatsapp messages between D1 and D2, and those between D2 and D3, although D2 and D3 were acquitted for reasons other than their involvement in the arrangements for opening the company accounts.

21.A lot of planning must have been involved in recruiting of D1, D1’s sister and others.  D1 was shown to have been the director and shareholder of 3 companies including Funson, and had made the application for opening of company accounts for those companies, whereas the evidence also shows D1’s sister as having opened multiple company accounts.  Share transfer documents were prepared at least in relation to D1 to enable her to become director and shareholder and to make the account opening applications, and company documents were provided by D3 to D2 and passed on to D1 for studying before going to the bank.  D2 had the role of briefing D1 on the answers she should give to the bank staff’s questions.  Even though D2 and D3 were acquitted, their involvement was planned by the fraudsters.  There is without a doubt a criminal syndicate operating the scheme which involved D1.

22.There were only 1 deposit and 1 transfer out of the Funson account.  But the charge spans a period of 6 months being the duration of the conspiracy. During this period, apart from going to the bank to open firstly a personal account which upon submission by her of further documents and making clarifications as requested by the bank, became the company account of Funson. The evidence in Court also indicates that she had taken a liaison role between the bank and D2 to pass on messages.

23.The Defence cited the authorities of Secretary for Justice v Wan Kwok Keung [2012] 1 HKLRD 201 and HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545. In Hsu Yu Yi, the appellant had personally dealt with a deposit of approximately $2.5 million, although the charge involved $25.8 million.  There was an international element.  The Court of Appeal made reference to the amounts involved in earlier cases of money laundering, and compared those with the $2.5 million personally dealt with by the appellant.  The sentence was reduced to 3 years and 5 months’ imprisonment after deducting one month for admission of the facts during the trial.  I consider that the present case is more serious, as it involves a larger amount as compared with the $2.5 million of Hsu Yu Yi.

24.For the case of Wan Kwok Keung, the respondent pleaded guilty to money laundering charge which involved depositing football bets he had received from clients into bank accounts.  There were 2,222 withdrawals and 1,696 deposits for a total amount of about $14 million within a period of 7 years. The laundering operation was however simple and without a syndicate.  It was held that the starting point should not be less than 4 years.

25.I consider that despite the amount of money being substantially less, and the duration much shorter, than those in Wan Kwok Keung, the present case has an international element, involving more parties, and is a more sophisticated crime requiring lots of planning.  I am therefore of the view that the present case is in nature more serious than Wan Kwok Keung.

26.I have considered the above factors, the guilty plea and clear record of D1, as well as all mitigating factors.  I find that for the very large amount of money involved (around HK$6,600,000), as well as the scale and degree of planning and the presence of the international element aggravating feature, the starting point of 51 months’ imprisonment is appropriate.

Giving Evidence for the Prosecution

27.D1 had been called as a witness for the Prosecution in the trial of D2 and D3.  Despite the acquittal of D2 and D3, D1’s evidence had been accepted by the Court.  In considering the degree of discount to be given to D1 for her assistance to the Prosecution, I have considered Z v HKSAR (2007)  10 HKCFAR 18, the importance of her evidence in the trial, and that the Court had accepted her evidence.  The Court will allow a 50% discount in sentence, which already includes the 30% discount for her guilty plea.

Delay

28.Defence submits that there has been a substantial delay since D1’s arrest to her plea of guilty.  The important parts of the Chronologies presented by the Prosecution and Defence in the Written Mitigation includes:

(a)  D1 was arrested on 15 May 2019;

(b)  Covering report to Department of Justice on 21 May 2021;

(c)  Legal advice from Department of Justice on 9 June 2022;

(d)  Charge dated on 18 August 2022;

(e)  The first mention date in District Court was held on 27 October 2022;

(f)  D1 indicated guilty plea and intention to provide assistance by writing to the Prosecution on 16 November 2022;

(g)  On 28 February 2023, D1 indicated her guilty plea in Court, and plea and sentence for D1 and trial for D2 and D3 were fixed for 24 January 2024;

(h)  D1 thereafter gave 2 NPS on 28 April 2023 and 18 January 2024;

(i)  D1 pleaded guilty on 24 January 2024. Adjournment application made by Prosecution was granted;

(j)  Translation and certification of 7,000 pages of WhatsApp records and bankers’ Affirmation ready in end of January 2024 ongoing contact with Danish witness;

(k)  Case was heard for mention, and the trial of D2 and D3 was refixed to 17 March 2025; and

(l)  D1 was convicted upon pleading guilty to the Charge and admitting the Summary of Facts. The trial against D2 and D3 commenced, whereby D1 testified against D2 and D3.

29.Defence submitted the authority of Chiu Chi Wing, CACC 243/2012 on delay as mitigation.  Seven factors were identified, even though they are not considered exhaustive or inflexible.  The factors relevant to the present case are:

(a)  Delay is not of itself a mitigating factor;

(b)  delay will not ordinarily be a mitigating factor if it has been caused by difficulties in detecting, investigating or proving the offences committed by the offender, and the period of the delay is reasonable in the circumstances;

(c)  delay will not ordinarily be a mitigating factor if it results from the normal operation of the criminal justice system, including delay as a result of the offender or a co-offender exercising his or her rights;

(d)  delay may be conducive to the emergence of mitigating factors; for example, if, during the period of delay, the offender has made progress towards rehabilitation or other circumstances favourable to him or her having emerged;

(e)  delay (not of the kind described in the paragraphs above)  will ordinarily be a mitigating factor if the delay has resulted in significant stress for the offender or left him or her, to a significant degree, in ‘uncertain suspense’; and

(f)  delay caused by dilatory or neglectful conduct by the State, prosecuting authorities or investigatory bodies may result in a discount of the sentence that would otherwise be imposed on the offender, if the court thinks it is an appropriate means of marking its disapproval of the conduct in question.

30.Defence submits in the supplemental mitigation that from D1’s arrest to formal plea, it took 6 years, whereas in the first mitigation submitted, it was stated to be 4.5 years.  It is believed that the discrepancy results from whether one counts the period until the first trial date when D1 pleaded guilty, or the refixed trial date when D1 pleaded guilty and was convicted. The Court believes that even considering the time from the first trial date until the refixed trial date in deciding whether there has been any delay, it is a result of the combination of the other Defendants exercising their right to contest the case, and the decision of D1 to testify against them.  The refixing was due to the voluminous volume of documents required to be translated and certified, as well as the need for D1 to provide another much more detailed NPS, in light of the WhatsApp messages.  These messages were only made available in December 2023 after the forensics division of the police made inspection of the mobile phones.

31.The Court also notes that D3 being the last Defendant to fall into the net, was arrested on 30 June 2020, over 1 year after D1 was arrested.  The first mention date in District Court was 27 October 2022, roughly 2 years and 4 months after D3 was arrested, which for a case with a predicate offence of email scam, although it did not involve a large number of remittances,  is not unreasonable bearing in mind that investigation would have to be conducted with the overseas victim of different time zone, bank documents would have to be obtained from 3 different banks on multiple bank accounts, and that the case had to go through mention dates in the Magistracy before reaching the District Court.  I find that there had not been any dilatory or neglectful conduct on the part of the authorities and the Prosecution to justify deduction in sentence.  The time spent reflects the workings of a normal criminal justice system.  I am also of the view that whether the charge against D1 remained the same from start to finish, and whether D1 had made admissions in the VRI do not assist the claim for delay in this case.

32.I am also of the view that the comparison of the duration of delay for other cases with vastly different backgrounds with the duration from arrest to plea in the present case is unhelpful for obviously reasons, as each case depends on its own facts.  The period as stated is also merely one of the factors to be considered.  For the above reasons, I find that there had not been any delay in this case.

33.Assuming I was wrong about the lack of delay, the Court has been unable to find any rehabilitation progress of D1 on top of what had already been advanced in her mitigation of her obtaining a part time job.  Therefore there is no ground for an additional discount for delay on this ground.

34.I also find that there is no suggestion of substantial stress, or that D1 had been left in a state of ‘uncertain suspense’.  Any Defendant facing punishment would face some degree of uncertainty, but that is not to say that every Defendant should be allowed a discount.  The uncertainty D1 faced was whether her evidence would be accepted as useful by the Court, and the sentence that would be imposed; and that more time is needed before she would be sentenced pending her evidence against the co-accuseds.  As D1 would have been given a discount in sentence for her assistance to the authorities, to make a further discount under this ground would cause an overlap.  I am of the view that the meaning of ‘uncertain suspense’ does not cover the present situation of D1.

35.The legal principles stated in HKSAR v Lam Ka Sin [2021] HKCA 180 as cited by the Defence is accepted by the Court as correct.  In that case, it had been confirmed that persons convicted of money laundering, even if they are first offenders, should be sentenced to a term of immediate imprisonment. There is no tariff for this type of case.

36.It has also been stated that rehabilitation should be considered, and the offender must have shown that he has dissociated himself from his past wrongful conduct, and has committed himself to the future respect of the law.  While this may appear vague, this Court is of the view that guidance should be sought from the facts of Lam Ka Sin.  Care must be taken not to overemphasize rehabilitation without considering at the same time the sentencing object of deterrence which is important for this type of case.

37.I find that the present case is however different in material respects from the case of Lam Ka Sin.  In Lam Ka Sin, the appellant was forced to process a cheque through her bank account by someone who escorted her to the bank and waited outside while she dealt with the cheque.  There was a fault on the face of the cheque and the transaction did not go through.  She withdrew from the arrangement.  It was a single transaction that did not go through.  In the present case, D1 not only did as requested by reading the company documents and making the application to open bank account, she also handled the follow up and liaison matters with the bank.  The conspiracy also lasted 6 months.

38.The appellant in Lam Ka Sin was 20 years old and from her psychological profile, vulnerable to influence of others.  D1 in the present case was 20 years old at the time of offence, but there is no suggestion of her being vulnerable to influence.  Her evidence indicated that she wanted to earn quick money due to her heavy debts, and she was given a free choice of whether to take the job.  The impression given by her in the witness box does not suggest anyone who is vulnerable.

39.Also in Leung Ka Sin, when considering the element of compassion in sentencing, came the fact that the birth of the appellant’s child 2.5 years after the offence and the departure of her boyfriend caused the appellant to make substantial change of her lifestyle.  Even though D1 in the present case had found a job that is legal, it is far from the degree of substantial change of lifestyle envisaged by the authority.

40.Based on the above analysis, there is no justification for the Court to reduce the sentence of D1 for delay, or to order suspended sentence or CSO due to exceptional circumstances.

Sentence

41.As I have adopted a starting point of 51 months’ imprisonment, by applying 50% sentencing discount, D1 is sentenced to 25 months and 15 days’ imprisonment.